How Distributed Energy Resources Can Lower Power Bills, Raise Revenue in US Communities

This guide explains how Distributed Energy Resources (DERs) can lower energy costs and generate revenue for US communities. It highlights the impact of the Inflation Reduction Act and FERC Order No. 2222 in lowering barriers to entry and creating new value streams. The document outlines three paths for local governments to expand DERs: utilizing aggregation to enter wholesale markets, implementing demand response programs with municipal fleets, and leveraging federal and state funding to accelerate community-wide adoption.

• Distributed energy resources (DERs)—including rooftop solar, battery storage, electric vehicles (EVs), and smart thermostats—provide benefits such as reduced utility bills for users, increased grid resilience, and the ability to meet climate and equity goals. On a community scale, DERs can reduce the need for new grid infrastructure or polluting natural gas peaker plants and create new revenue streams for local governments through wholesale energy markets.
• Two federal actions are accelerating DER adoption: the Inflation Reduction Act, which provides direct financial incentives and rebates for technologies like heat pumps and battery storage, and the Federal Energy Regulatory Commission’s (FERC) Order No. 2222. Order No. 2222 allows bundles of DERs to provide services to the grid for financial compensation, with a minimum aggregation size requirement of no more than 100 kW.
• Local governments can deploy DERs through three primary strategies: aggregation, demand response, and accelerating adoption. Aggregation allows governments to sell power or grid services via wholesale markets, either directly or through third-party aggregators. Demand response involves using assets like municipal EV fleets to shift charging to off-peak times to generate revenue. Adoption can be accelerated using tools like the Federal Funding Opportunities for Local Decarbonization (FFOLD) or by offering residents property tax exemptions and educational campaigns.

APA

World Resources Institute (2022). How Distributed Energy Resources Can Lower Power Bills, Raise Revenue in US Communities. https://www.wri.org/insights/distributed-energy-resources-explained-us

Chicago

World Resources Institute. How Distributed Energy Resources Can Lower Power Bills, Raise Revenue in US Communities. 2022. https://www.wri.org/insights/distributed-energy-resources-explained-us.

Wikipedia

{{cite report |author=World Resources Institute |title=How Distributed Energy Resources Can Lower Power Bills, Raise Revenue in US Communities |date=30 September 2022 |url=https://www.wri.org/insights/distributed-energy-resources-explained-us |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldresourcesinstitute2022how, author = {{World Resources Institute}}, title = {{How Distributed Energy Resources Can Lower Power Bills, Raise Revenue in US Communities}}, institution = {World Resources Institute}, year = {2022}, month = sep, url = {https://www.wri.org/insights/distributed-energy-resources-explained-us}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }